How to find entry points in the Forex market?
With experience, each trader develops his own "secrets" and chips. This primarily concerns the entry points to the Forex market. And although almost every beginner begins his journey with the same books on technical analysis, and indeed on trading, everyone has their own results. Even more - almost all traders sooner or later make sure that the usual tips from the books do not work! And below we will consider why. The peculiarity is that you need the correct Forex entry points, which are developed by the trader himself. The books either omit some important details or give tips for more experienced traders with “for granted” features.
What do currency trading courses say?
If you are careful enough, it’s easy to make sure that almost every training broker company uses classic features from adherents of technical analysis like A. Elder, E. Naiman, etc. That is, the points of entry into the Forex are based on reversal patterns. For example, we find “Head and shoulders” and open on Sell.
This figure must be found at large time intervals - from daytime and above. Like, smaller timeframes have a lower probability of a successful transaction. The fallacy of this approach may manifest itself after you have completed a training course with a broker.
Teachers are advised to “hold the open deal” for a long time, allowing profits to grow and close when a trend continuation pattern appears on the chart like a rectangle or a symmetrical triangle.
In fact, this figure can work on smaller timeframes. To use it as efficiently as possible, you need to filigree fix entry and exit points. "Why?" - you ask. Because too many traders use it today, which means that your entry and exit into the market should be ahead of the crowd.
VSA: we consider volumes on futures
Volume information comes from the Chicago Mercantile Exchange (CME), i.e., from the Chicago Mercantile Exchange. VSA is analyzed simply: the trader finds places where large market orders accumulate, and as soon as the price has fixed above or below this level, he opens a deal.
The trading algorithm is simple:
price fixed above a strong level of volumes.
the price rolls down and breaks the previous peak - this is the entry point.
the transaction is closed as soon as the next level of a large accumulation of transactions is reached.
We place StopLoss under the base of the wave below a strong level, opening a long trade.
This approach works fine, you just need to get used to working with volumes, as traders on the stock exchange do.
Elliott in his wave theory defined an algorithm for market movements, dividing them into impulse and correction waves.
In order to correctly work out the entry points, you must adhere to the following conditions:
to trade with a trend, you need to see it, determine it - in this case, the impulse waves will be longer than the correction ones.
Wave analysis allows the trader to determine the point of movement of currency pairs from the position of the wave movement structure - this is the beginning of the trend or its completion.
the goals of the movement of trend waves - if the top of the first wave has been broken, then most likely the third wave will make a movement of 162%.
According to the wave analysis, entry points will appear:
when A-B-C correction ends.
when the previous peaks of the subwaves on the pulsed waves will be broken.
Using wave analysis, B. Williams was able to increase his own deposit by almost 20 times in 2 years! This is direct evidence of the effectiveness of the Elliott Wave Theory.